Litchfield v. Falconer

COLLIER, C. J. — It is insisted for the plaintiff, that the Circuit Court erred — 1st. In admitting the deposition of Also-brook to be read to the jury as evidence. 2nd. In rejecting the transcript of the record from the Circuit Court of Sumter, to shew the pendency of a suit in that Court in favor of the defendant, Allen, against the plaintiff. 3rd. In refusing to instruct the jury that, if they believed the plaintiff endorsed the note of the Arringtons to the defendant, Allen, Ctsuch endorsement might furnish a sufficient consideration for the note sued on.” 1. By a statute of this State, it is enacted, that whenever any suit is pending in any court founded on any writing under seal, it shall be lawful for the defendant, by special plea, to impeach its consideration in the same manner as if it had been sealed. [Aik. Dig. 283, sec. 138.] It was then competent for the defendants to plead either a want, or the failure of the consideration. It is a settled principle, both in the English and American courts, that parol evidence is not admissible to contradict, vary, or materially affect, by way of explanation, a contract in writing. [Reading vs. Weston, 8 Conn. Rep. 121; Stevens et al. vs. Cooper et al., 1 John’s Ch. Rep. 425; Reed vs. Clark, 4 Mon. Rep. 20.] This rule rests upon the ground that written evidence is of-a higher grade than the mere verbal declarations of witnesses; and consequently, where parties have agreed [283] upon the terms of a contract, which is afterwards reduced to writing, the verbal agreement is merged in the written contract. [Barber vs. Brace, 3 Conn. Rep. 9; Sommerville vs. Stephenson & Johnson, 3 Stew. Rep. 271; Mead vs. Steger, 5 Por. Rep. 498. See further the cases collected in 5 Am. Com. L. cases 174; Paysant vs. Ware & Barringer et al. ,Ala. Rep. N. S. 160; White vs. Beard, adm’r., Ibid 436.] Notwithstanding the generality of the terms in which the principle is declared, it has been often held, that the maker of a promissory note, notwithstanding the usual expression of consideration, such as “for value received,” &c., may show as against the payee, or other person standing in the same situation, that the note was given without consideration, or that the consideration has failed; or that a fraud in respect to it was practised upon him by the other party; and under some circumstances, that the consideration was illegal. The American decisions to this point are collected by the learned annotators upon Phillips’ Evidence, Cow. & H.’s ed. 3 vol. 1458-9. See also Murchie vs. Cook & McNab, 1 Ala. Rep. N. S. 41; Simontons vs. Steele, ibid 357. In Goddard vs. Cutts, 2 Fairf. Rep. 442, it is said that, when a note “ has been made, executed and delivered as such, it is not admissible by law to look for any of its terms aliunde. They can be proved only by the instrument itself.” [To S. P., Harris vs. Caston, 2 Bail. Rep. 343.] And it has been holden, that a note payable on demand, or on a specified day, cannot be varied in its operation by evidence of a previous, or contemporaneous, verbal agreement that the principal should not be called for, so long as the interest was punctually paid; or that it should be paid at another time, or in any other mode than it imported on its face. [Trustees, &c., vs. Stetson, 5 Pick. Rep. 506 ; Woodbridge vs. Spooner, 1 Chitty’s Rep. 661; Dow vs. Tuttle, 4 Mass. Rep. 414; Fitzhugh vs. Runyon, 8 Johns’ Rep. 375; Bradley vs. Anderson, 5 Vern. Rep. 152; Thompson vs. Ketcham, 8 Johns’ Rep. 189.] So it has been decided that, where one adds, after the close of a promissory note signed by another, that he acknowledged himself to be bound as surety for its payment, he is considered as an original promissor; and parol evidence that he was to be liable to [284] pay, only on condition that the other promissor could not, is inadmissible. [Hunt vs. Adams, 7 Mass. Rep. 518; see also O’Hara vs. Hall, 4 Dall. Rep. 340 ; Clark vs. McMillan, 1 No. Caro. Law Repo. 265.] In Sommerville vs. Stephenson & Johnson, 3 Stewart’s Rep. 271, it was held that parol evidence of an agreement, between the endorser and endorsees at the time of the assignment of a bond, that the latter should not require payment of the obligor within two years, was not admissible as an excuse for not employing due diligence, so as to charge the endorser. And in Dupuy vs. Gray, Minor’s Rep. 357, which was also an action against the assignor of a bond, it was decided, that evidence of a verbal agreement, made at the time of the assignment, that the assignor was not to be liable until it should be ascertained by suit, that the money could not be collected of the obligor, went to vary and control the terms and legal effect of the contract in writing, and was consequently in admissible. [See also Wesson vs. Carroll, Minor’s Rep. 251; Odam vs. Beard, 1 Blackf. Rep. 191; Butler vs. Suddeth, 6 Mon. Rep. 541.] So the legal effect of written contracts cannot.be varied or explained by parol evidence any farther than an express stipulation. [Barringer et al. vs Sneed, 3 Stewart’s Rep. 201; La Farge vs. Rickert, 5 Wend. Rep. 187 ; Pattison vs. Hull, 9 Cow. Rep. 747; Creery vs. Holly, 14 Wend. Rep. 30; Hightower vs. Ivy, 2 Porter’s Rep. 308 ; Simpson vs. Henderson, 1 Mood & Malk. Rep. 300.] Where the written agreement is equivocal, it is said the circumstances under which it was made, may be- shewn in order to explain its meaning. [Crawford et al. vs. Janets, adm’r., 2 Leigh’s Rep. 636 ; see also ex parte Adney, 2 Cowp. Rep. 460; Haywood vs. Perrin, 10 Pick. Rep. 228.] And a parol agreement, upon a sufficient consideration, made subsequent to the giving of a note, is admissible in evidence to vary its legal effect. [Erwin vs. Saunders, 1 Cow. Rep. 249; see 3 Phil. Evi. Cow. & H.’s ed. 1477, and cases there cited.] So a contemporaneous written agreement, connected with a note by direct reference, or necessary implication, may be resorted to, for the purpose of varying its legal effect and import. [Hunt vs. Livermore, 5 Pick. Rep. 395 ; Davlin vs. Hill, 2 Fairf. Rep. 434.] And if a note expressly refer to a verbal condition ali285 unde, without showing what the condition is, the condition may be proved, and thus annexed to the note. [Couch vs. Meeker, 2 Conn. Rep. 305. Having stated these illustrations and qualifications of the general rule, that parol evidence cannot be received to contradict, vary or materially affect, by way of explanation, a contract' in writing, we proceed to consider whether the deposition read to the jury in the Circuit Court was improperly admitted, The pleas were : first, that the writing sued on was executed without any consideration; second, that the consideration had failed. These pleas are affirmative, and the onus of sustaining them by proof lay upon the defendants. To do this, it was indispensably necessary, that the circumstances under which the writing was made, should have been shown to the jury : otherwise it would have been impossible to show, either that there was no consideration, or that the consideration had failed. The deposition states the contract between the parties, and the inducements of the one to make, and the other to receive, the note, and thus far, it was clearly admissible. If it discloses other facts, which it was not allowable to show, these facts should have been specially objected to ; but the objection being to the entire deposition, the Court was not bound to distinguish between the legal and illegal testimony; but finding a part of it proper, the refusal to reject the whole is not available on error. The defendants, by their note, promise to pay on a day certain; and any evidence tending to shew that it was previously, or simultaneously, agreed by parol, that payment should not be required until a more distant day, or until the happening of some future event, would be obnoxious to the objection of varying the written contract, and therefore inadmissible. If the note of the Arringtons was handed over to Allen without an endorsement, the defendants could not shew in their defence, that there was a verbal agreement between the plaintiff and themselves, that they should not be called on to pay their note, until an effort had been made to coerce a collection of the Ar-ringtons : for, as this might not be done until their note had become due, such evidence would go to fix a day of payment different from that expressly stipulated by the parties. [286] So, if Allen received the note of the Arringtons with the general endorsement of the plaintiff, the defendants could not have shown that there was a verbal agreement simultaneously made, by \frhich the legal steps, in order to charge the endorser, were to be dispensed with. The eases of Sommerville vs. Stephenson & Johnson, and Hightower vs. Ivy, already cited, are explicit, upon this point. But' it would have been competent for them to prove that the remedy against the Arringtons had been exhausted without obtaining a satisfaction of their note; for the consideration of the defendants’ note would then have failed, and the liability of the plaintiff as an endorser, would have attached in favor of Allen, his endorsee. We have considered the defence upon the hypothesis, that the note of the Arring-tons may not have been endorsed by the plaintiff; because the evidence on that point is not set out in the bill of exceptions. 2. If it appeared from the bill of exceptions, that the note of the Arringtons with the plaintiff’s endorsement, had been given in evidence by the defendants,- then the transcript of the record of the suit from the Sumter Circuit Court would have been unnecessary, if not inadmissible; but it does not appear that, that note was before the jury. It may have been that the note was produced and the endorsement was erased, so that it became necessary to. show the fact by evidence aliunde. Upon either, supposition, the transcript was admissible to prove that the note described in it had been endorsed ; and it would have been competent for the plaintiff to identify it by other testimony. As the fact then proposed to be shown, was prima facie important to enable the plaintiff to rebut the defence set up, the rejection of the transcript is a fatal error. 3. The transcript being excluded by the Court, it does not appear that there was any evidence before the jury of the plaintiff’s endorsement; had there been, the charge prayed should doubtless have been given. The transfer of a promissory note by endorsement, furnishes a sufficient consideration for a promise by the endorsee, to pay the endorser an equivalent sum, and the onus of showing a failure of consideration is then thrown upon the endorser. We cannot think the bill of exceptions (though drawn out to an unnecessary length) states all the material facts which were proved at the trial, certainly not enough to present for revision all the questions intended to. be raised. Upon the second point, the judgment is reversed and the cause remanded.